Marketing ethics can be described as formulating policies to establish practices which are transparent and trustworthy. It is establishing marketing policies for corporate sectors where actions show integrity and fairness to consumers and all other stakeholders. (Murphy, Laczniak, Bowe&Klein,2005). The main purpose of marketing ethics is to address principles and standards for developing acceptable conduct in the market. (Ferrell, 2005)
Relationship between the consumer and the organization is a covenant which is based on mutual trust, integrity, honesty and fairness. For all practical purposes, the consumer is one of the most important stakeholders in the organization. It is imperative that the firms work under moral codes which can prove to be the core building blocks in maintaining consumer-organization relationship.
The firm’s activates directly or indirectly affect the stakeholders, be they individuals, groups or communities. (Freeman, 1984). With the continuous growth of business, industry and increased push for marketing efforts, ethics is rising to be the top of corporate agenda. (Kotler et al, 2002)
Marketing ethics and social reasonability should go hand in hand. It is the social responsibility to formulate policies which are acceptable ethically and which work not for maximising the profits of the organization but which aims at the larger interest of all the stakeholders.
Examples and Cases
We all hear stories and news about unethical (dangerous) practices of businesses. Not only those unethical practices are used to increase profits, they are take people’s lives. Union Carbide’s Plant in Bhopal, India, (which reportedly caused the death of 25000 people due toxic fumes) is the notorious examples of Unethical marketing practices. According to a report published on the Action for Our Planet website, Covalence, a Swiss research company, exposed that the top 10 unethical companies were the multinational multibillion-dollar companies. Their multi-billion dollar profits are the worst of crimes, the report stresses. These multi-national companies work in oil, gas, agriculture, smoking, travel, mining and food sectors.
Several big companies have tarnished their image by involving in practices which do not correspond to acceptable moral standards and codes. Many other have lost hefty sums of money in fighting legal suits to defend themselves.
Ways to Check Unethical Practices
There are different opinions on the issue. One stand is that such issues should be addressed by the legal systems and free market and that companies and managers are not responsible for moral judgements (Kotler et al, 2002), while the other view is it is not enough to look to the legal system and companies need to work beyond that.
1. Legal Systems
The legal systems formulate policies and pass laws for the corporate sector to conform to these laws and ensure best practices. The US, Europe and other countries have made considerable progress in the area and due to public opinion and pressure groups, new laws are being introduced to deal with more complex situations.
2. Responsibility of the Business Sector
A more enlightened philosophy is the approach which suggests that companies should have social conscience, and that companies and managers should apply high ethical standards of morality when making corporate decisions regardless of what the system allows (Kotler et al, 2002). That means a legal system may have a loophole or may not cover an area, but corporate managers must look beyond that. Long run consumer welfare, societal marketing concept, personal integrity and corporate conscience must be what the corporate people should work on.
3. Non-Profit Organization
Non-profit organizations have come into existence due the increased awareness of the dangers and hazards posed to our environment, individual and human rights. There are associations and organization especially working to bring marketing to ethical standards. The American Marketing Association (AMA) defines marketing to include the general interest of the society at large.
By and large, top companies strive hard to save their image by not involving in activities that could damage their reputation and tarnish their image. Legal systems, corporate conscience and non-profit public organizations make effort to conform to all acceptable standards and ensure that marketing practices are being implemented according to the highest moral and ethical standards. However, all is not good! There are still male-practices in the business sectors, both within and outside the organizations. Issues such as child labour, health and safety, beneficial products, welfare of the society, human rights, abuse of labour in third world countries etc. need to be addressed. New laws are needed to cover the loopholes. Corporate managers must do even more to work for the general welfare of the society at large.
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